Beleaguered Dell to lay off 8,000 employees as 1Q earnings dip

Apple Store“Dell Inc. said Thursday that earnings fell slightly in preliminary first-quarter results, and the computer maker planned to lay off more than 8,000 employees over the next year as part of an ongoing restructuring,” Matt Slagle reports for The Associated Press.

“Dell said it earned $759 million, or 34 cents per share, in the three months ended May 4. That compared with $762 million, or 33 cents per share, in the year-ago period,” Slagle reports.

“First-quarter sales rose nearly 1 percent from the year ago period to $14.6 billion,” Slagle reports. “Analysts, on average, expected earnings of 26 cents per share on sales $13.95 billion, according to a poll by Thomson Financial.”

Slagle reports, “Round Rock-based Dell’s earnings statements from the second, third and fourth quarters also remain preliminary and have yet to be filed with the Securities and Exchange Commission because of an ongoing federal accounting probe that found numerous errors, evidence of misconduct and financial control deficiencies.”

“Thursday’s report included a charge of $46 million, or 2 cents per share, for costs related to the investigation,” Slagle reports. “Dell also hasn’t filed its annual report for the fiscal year ended Feb. 2.”

Slagle reports, “The layoffs, which represent 10 percent [MDN Note: Actually, it’s 9%.] of Dell’s global work force of 88,100 full time and part-time employees, come as Dell struggles to regain market share after Hewlett-Packard Co. ousted it from the top spot in worldwide computer shipments last year.”

Full article here.

MacDailyNews Take: Mikey really ought to get to work figuring out how he’s going to sell the company and give the money back to the shareholders.

54 Comments

  1. Rather than gloat, let’s show some sympathy to 8000 people who just lost their livelihood with bills to pay and mouths to feed. I wish them luck in finding new employment.

  2. More to come-

    88K people is a lot of folks to have for a ‘supposedly’ efficient mass producer like Dell. Volume of units shipped doesn’t justify the number of people on the payroll.
    Especially since most of their products are outsourced to OEM manufacturers.
    This is just the first wave of layoffs for Dell as they trim their product lines & headcount in order to reduce costs.

  3. “Rather than gloat, let’s show some sympathy to 8000 people who just lost their livelihood with bills to pay and mouths to feed.”

    Fsck them.

    That’s what happens when you do deals with the devil.

  4. I think I prefer gloating. Life is tough all around, and their CEO is an arrogant prick. I have family in that part of Austin and when Dell was ridin’ high there was plenty of smugness within the Dell culture. They even came up with a name for employees who had become millionaires with Dell stock options. They were called “Dellionaires”. Aww, isn’t that cute? And they looked down their noses at Macs, and people that used Macs only did so “because they just weren’t computer savvy”. So now I laugh at the demise of this crap company that represents so much of what is wrong with the tech industry. They’re finally seeing that their delusions of grandeur were not warranted.

  5. All in all, its an unfortunate turn of events for Dell employees. I’ve been a fervent Mac user from the very beginning, through thick and thin. Fortunately for me and those like me, Apple had the visonary genius of Steve Jobs to keep the company viable and, frankly, resurrect it. I’m sure there are numerous Dellionaires who will be unaffected by these layoffs. Its not them whom I’m concerned about; I’m concered for the 8000 honest work-a-day men and women who do not have huge stock options to fall back on.

    Don’t get me wrong — I truly think Mr. Dell and his products suck donkey dick. But empathy is a very human trait, and I do feel for the average Joe who was lured in and, ultimately, fscked by that asshole.

  6. Beleaguered Dell = Delleaguered

    People will have different “realistic” takes on these numbers but the bottom line is that 8k employees and their families will have immediate problems in the next few months, financially and emotionally.
    It’s not like the US economy is rapidly growing at this time, and these laid off employees will have available jobs right away. To them, this is the only reality that matters.

  7. We would win over more Mac converts by demonstrating empathy for those losing their Dell jobs than by saying “fsck them.” (Besides, it’s the right thing to do.) That does NOT mean we can’t also have a chuckle at Michael Dell’s expense, though, big A$$HOLE that he is.
    BTW, these job cuts have nothing to do with outsourced call centers–which may, in fact, have saved other jobs at Dell by permitting it to be more competitive on price. Unfortunately, many consumers are clearly willing to trade crappy service for a cheaper up-front price–and that’s their choice, though it isn’t mine.

  8. Can we all try and be a little less hard-hearted about this story.

    Whilst it’s impossible to make an omelette without breaking eggs and redundancies were and continue to be the blunt weapon of choice when getting a company back in shape, it ill behoves us to dance on the career graves of the first 8000 people to be fscked over in Dell’s quest to cut more costs (?!?) from its profit and loss chart.

    Hopefully, the majority of redundancies will be focussed in economies which are a little more buoyant than that of the US as a whole at this moment, thus affording the unfortunates who get canned a realistic chance of being re-employed somewhere else.

    But, at the end of the day, let’s ask one practical question: how many times does this strategy succeed when the company in question has a) no differentiating products, b) unique selling proposition and c) no substantive “relationship” with its customers.

    I can remember companies who had one or two of those qualities and they still died (Data General) or are coughing up blood at this time (Silicon Graphics anyone?). So when you have none of the above, plus lousy build quality, zero R&D and an unprincipled “bait & switch” approach to sales, how do you think this story is going to end?

  9. Goodbye Michael Dell!!

    You were an steathly and almost non-existent leader.
    Your words and deeds will dissipate like the smoke you
    tried to sell.

    Apple is always looking for high-income individuals to boost
    it’s stock price. Buy a block of 30,000 and insure your retirement.

    Just a poor Mr. Dell thought.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.